Execution of the strategy yields growth and results

INTERIM REPORT FOR THE PERIOD JULY – SEPTEMBER 2019

THIRD QUARTER

  • Net sales totalled SEK 27.5 (16.8) million.
  • Net operating profit/loss totalled SEK 3.3 (-0.4) million.
  • The profit/loss totalled SEK 3.2 (-0.7) million.
  • Earnings per share totalled SEK 0,01 (0,00).
  • Cash flow from operating activities totalled -3.4 (-0.2) million.

INTERIM PERIOD JANUARY – SEPTEMBER

  • Net sales totaled SEK 53.1 (53.7) million.
  • Net operating profit/loss totaled SEK -11.9 (-5.7) million.
  • The profit/loss totaled SEK -12.3 (-7.2) million.
  • Earnings per share totaled SEK -0.03 (-0.02).
  • Cash flow from operating activities totaled SEK -14.7 (-17.0) million.

SIGNIFICANT EVENTS DURING THE QUARTER

  • Further implementation of Precise fingerprint software in collaboration with Egis Technology within Mobile
  • Precise integrated in the first biometric smart card module with Mastercard CAST certificate
  • Expanded offering in Digital Identity by launching YOUNiQ access – a product developed for physical access to facilities

SIGNIFICANT EVENTS AFTER THE END OF THE QUARTER

  • Collaboration agreement with Infinity optics

FINANCIAL DATA AND KEY INDICATORS

KEY INDICATORS

20192018201920182018Rullande
Amounts in SEK thousand unless otherwise statedQ3Q3Q1-Q3Q1-Q3Fullyear12 mån.
Net sales27 52116 81753 11153 69767 64567 059
Net sales growth, %63,6%66,8%-1,1%14,6%10,8%-1,2%
Gross margin, %89,2%84,3%82,5%86,4%85,2%82,1%
Operating profit/loss3 259-367-11 883-5 696-19 958-26 145
Operating margin, %11,8%-2,2%-22,4%-10,6%-29,5%-39,0%
Cash flow from the operating activities-3 439-153-14 734-16 988-26 055-23 801
Cash and cash equivalents60 90891 30960 90891 30979 54360 908

Definitions, see financial glossary.

PRESENTATION OF THE INTERIM REPORT

In connection with today’s interim report, we include an invitation to a telephone conference/webcast today at 10:00 AM.

The conference call starts at 10:00 AM (CET).

Link to all public information such as link to audiocast and participant number for the telephone conference.

https://financialhearings.com/event/11725

To take part, click on the link above to listen to and follow the presentation online, or call +46850558351 to follow it over the phone.

You will be asked to state your name when you connect to the conference call and there will be an opportunity to ask questions in Swedish. The conference call will be held in English.

Participating on behalf of Precise:
Stefan K Persson, CEO
Ulrik Nilsson, CFO

CEO COMMENTS
I am proud to report a generally strong result for Q3. Our strategy to work on a more focused basis is having increasing effects, which is reflected in both revenue and results. Revenue totaled around MSEK 28, having increased by 64 percent from the same period of the previous year. Through the agreement with Egis Technology – which generated around MSEK 17 – we have strengthened our position in the Mobile area. In Q4, we expect further integration of our software in collaboration with Egis. In the Digital Identity area, too, in which we develop products in several different application areas, during the quarter we gained the first commercial orders in the access for delivery 2020 application area.

Increasing demand
We can see demand increasing for simpler and safer identification solutions for other application areas besides mobile devices, which are the focus of our Digital Identity area. One example of the application area is access, where we are developing a product for various types of access solutions. The product consists of specially-developed identification software intended for various types of authorization control. Using our identification software – and a camera connected to the system – a user’s identity can be verified more smoothly and safely than ever before. The passive identification of the user entails that the user does nor need to use keys or an access card to enter the door.

We have strong faith in our Digital Identity growth area and the products we are developing in this area. We continue to invest in this area, with an initial focus on the Nordic market. Most of the ongoing pilot projects, and also sales, are currently taking place in the Swedish market. The product is still at an early stage of the commercialization process, and revenue is therefore limited. We are working to scale up the product and prepare the company for higher inflows of orders from new customers in 2020.

Within Smart Card, we reached an important milestone during the quarter when our software was used in the first payment card to achieve the Mastercard CAST certificate. The certification is the result of several years’ development work and proof of our strength within the commercialization that we previously announced was expected to take place in 2020 at the earliest. We look forward to continuing to develop our product for smart cards before the commercial launch of the first payment card with a fingerprint reader.

In 2019, we implemented a completely new strategy for Precise, which entailed streamlining measures, primarily in the Mobile area, and the development of the Smart Card and Digital Identity areas. We have given a new boost to our development power and will keep up this pace in our creation of new products. We continue to work on developing our identification software and also increasing our product range to suit additional application areas. Precise core is based on innovation, with a focus on meeting the demand for smooth and safe identification and enabling people to be their own keyring. Cooperation with Infinity Optics enables convenient and secure identification of the user without storing the biometric template, which is a good example of our strategic direction.

We continue to work on executing the strategy for sustained growth and performance.

Stefan K Persson, CEO